Settling an estate of a deceased loved one is a timely process that takes several months — or sometimes years — to complete, depending on the circumstances. Even so, it’s a necessary headache that must be dealt with. To help simplify things, we’ve put together the following steps to make this complicated process a little easier for you.
Nebraska estate law administers inheritance tax through county courts rather than at the state level. The tax rate is not fixed, rather it’s basically a certain percentage of the market value of the assets subject to taxation decided based on the relation of the inheritor(s) to the deceased.
Like we mention above, settling an estate is a time consuming and complicated (no matter what state you’re in), so seek out the help of an estate lawyer to further guide you through the process.
Step 1: Make an inventory of documents and assets
Before meeting with an attorney or anything else for that matter, make a comprehensive catalogue of the decedent’s documents and assets, including (if applicable):
- Last Will and Testament
- Burial/memorial instructions
- Revocable Living Trust
- Life insurance policies
- Bank statements
- Brokerage statements
- Stock and bond certificates
- Corporate records
- Car/boat titles
- Last three years of decedent’s income tax returns
Step 2: Open a probate estate
This requires meeting with an estate lawyer to officially open a probate estate with the local probate court. (Probate is the legal process that administers a decedent’s estate.)
Step 3: Establish value of assets
Establish the values of all the decedent’s assets as of the date of death. This can get messy, so make sure all of the following is taken care of:
- Contact all financial institutions that house decedent’s assets and obtain date of death values.
- Have a professional appraise all assets, including real state, jewelry, artwork, collectibles, businesses, etc.
- If the estate isÂ eligible for federal taxesÂ and/or state taxes, then values for non-probate assets will need to be established as well.
Step 4: Pay final bills and other expenses
- Establish what legitimate bills were owed at the time of death and pay them.
- Pay for any ongoing expenses of administering the estate, such as legal fees, accounting fees, mortgage payments, utilities, etc (these usually come out of the estate).
Step 5: Pay income and estate taxes
Once the final bills are taken care of, the personal representative should focus on paying necessary income and estate taxes. An estate lawyer can take you through this process to make sure the following is properly prepared and filed:
- Final federal and Nebraska income tax returns
- Final federal and Nebraska estate income tax returns
- Final Nebraska estate income tax returns if‚ estate earns income during course of settlement
- Final federal and Nebraska inheritance tax returns
Step 6: Distribute the balance to estate beneficiaries
Once all bills and taxes are paid and the remaining assets are assigned a value, the county probate court will review everything and legally administer the distribution of assets properly as deemed in the Last Will.
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